Merchants making deliveries to central London face extra costs following city mayor Ken Livingstone’s fresh proposal to hike the daily congestion charge to £7 per day for commercial vehicles.

The proposed 40% hike has been labelled “outrageous” by the Freight Transport Association, which said the rise would break previous promises not to increase the charge until 2010. It said the move would cost industry millions of pounds without any further improvement in traffic levels.

Travis Perkins group transport manager Graham Bellman said: “It’s another tax that we have to deal with. The administration will be a big cost for us but we can’t not pay it.”

Mr Bellman said the company’s biggest cost in the zone was parking fines, which total £10,000 a month, mostly incurred during unloading. He said truck-mounted fork lifts used to help unload deliveries were also liable for congestion charges, something the company is attempting to overturn.